However, she also backed the competition commission's ruling that the group could not buy the East Northants Herald & Post series, the Northampton Herald & Post, the Peterborough Herald & Post and the Stamford Herald & Post.

The commission said Johnston Press would control "virtually 100%" of the local markets in the Northampton and Peterborough areas, allowing it to raise advertising prices "discriminately" and would deter rivals from entering the market.

Ms Johnson has also asked the head of the office of fair trading, John Vickers, to launch an inquiry into concentration in ownership of regional and local newspaper titles.

"She has invited the director general of fair trading to consider whether to initiate an industry-wide inquiry into the implications for local concentration in the ownership of regional and local newspapers, if consolidation in the industry were to continue.

"The commission questions whether the spread of local monopolies might give rise to a 'live and let live' attitude among major publishers, that is a tacit sharing of the market on a geographical basis," said the department of trade and industry in a statement.

Johnston Press bought Regional Independent Media, owner of the Yorkshire Post, for £560m in March this year, in a deal that combined the fourth and fifth largest groups in the UK's rapidly consolidating regional newspaper market. The combined group would control 14% of the market.

Trinity Mirror, owner of the Daily Mirror, the Sunday Mirror and the Daily Record, owns 235 regional and local titles.